Analysts Recommend SCGP at ฿50-51 towards an Excellent Earnings of ฿6,000Mn in 2020

The analyst expects SCGP to report excellent 2020 earnings on January 26, 2021 at 6,266 million baht, an increase of 19% YoY, while estimating 4Q20 profit to reach 1,551 million baht, increasing 30% YoY. The analyst recommends “BUY” at 50-51 baht per share in expectation of higher profit in 2021 predominantly driven by the Go-Pak acquisition.

 

Capital Nomura Securities (CNS) estimated SCG Packaging Public Company Limited (SCGP) to report an earnings of 1,551 million baht in 4Q20, an increase of 30% YoY, from a 19% higher in gross profit margin (GPM) as the contribution from integrated packaging chain business rise to 87%, along with a lessening of competition in Indonesia’s packaging paper industry. 

 

Analyst also projected a SCGP’s EBITDA of 262 million baht, decreased from 465 million baht in 4Q19 following a repayment of loans of 13 billion baht in the early of 4Q20, an exercise of IPO. 

 

CNS expected a total revenue from sales in 2020 to stand at 92,304 million baht, increased from 89,070 in 2019, meanwhile targeting a net profit of 6,266 million baht, up from 5,268 million baht a year ago. 

 

Therefore, CNS reiterated a “BUY” recommendation on SCGP with a target price of ฿50.00/share in expectation of an outstanding normal profit growth in 2021-2022 of 17%. Also, the acquisition of Go-pak is likely to boost SCGP’s 2021 profit by 5% or equivalent to approx. 420 million baht, as well as EBITDA margin of fiber-based packaging business. Go-pak will support SCGP in sustainable long-term growth as it has given access to customer base in the UK, Europe and North America.

 

Tisco Securities also recommended “BUY” on SCGP with a target price of ฿51.00/share and forecasted an earnings in 4Q20 to remain positive at 1.4 billion baht, increased 6% QoQ and 19% YoY. And revised net profit in 2021-2022 up 8%.